the result is an estimated reduction of 4,500 full-time scientists and engineers working on basic endeavors in the area of energy science. it will terminate the early career research program for young faculty and ongoing graduate programs in the energy sciences. national user facilities that the office of science runs for upwards of 27,000 researchers from industry and academia will be shuttered or put into a standby status. this includes the four nano science centers across the united states that have had breakthrough discoveries to propel our industries forward in the areas of solid state lighting and new drugs and microelectronics.

let me talk about some of the other programs impacted in the department of energy. the office nuclear energy. this is leading the way to a new generation of smaller, less costly reactors at places such as oak ridge and idaho national laboratories. this effort will suffer. the ability to move this bipartisan program forward will cease. in the office energy efficiency and renewable energy, eer&e, as it's referred to in the department. the house bill will result in over 31,000 homes that will not be weatherized, and, by july 1, it is estimated that something like 8,000 people who are expected to perform this work will be out of jobs. the program to mix coal with biomass -- this is a program that shows great promise -- will be eliminated, as will programs

to fund offshore wind. let me cite some other examples of the damage the house bill will have on other agencies in the competes act. the national science foundation will have reductions leading to a loss of 10,000 university researchers and graduate students. being so late in the year -- and i indicated we've got about five months left in this fiscal yea year -- the effect will to be reduce the program to train teachers in math and science by 53% at a time when it is widely recognized that other nations are outperforming us in student test scores in these subjects. mr. president, i'd like to enter into the record two letters, the first by the council on competitiveness, signed by sam allen, who's chairman and c.e.o. of the deer company, mike splinter, chairman and c.e.o. of applied materials, chad

holloday, chairman of the bank of america, william hite, president of the united association of plumbers and pipe fitters, and deborah wynn smith, the president of the c.e.o. counsel. the letter succinctly stated that -- quote -- "scientific researchers and skilled workers are the basis for new ideas, new technologies, new products and services, new companies, even entirely new industries. the american economy cannot compete and grow if we neglect our capacity to innovate." the presiding officer: without objection. mr. bingaman: thank you, mr. president. the other letter is from 175 universities, industries, and laboratories, including the u.s. chamber of commerce, and it supports the goals outlined in the america competes act and asks that -- and it goes on to ask the congress to reject the cuts adopted by the house funding bill.

i would ask that that second letter also be included in the record. the presiding officer: without objection. mr. bingaman: let me move to the issue of homeland security. over the last several years, we've had a lot of speeches here in the senate about the need to bolster border security, particularly along the southern border. enhanced homeland security capabilities -- enhance homeland security capabilities. unfortunately, the budget the house has presented falls short in this respect. the continuing resolution would severe impact the capabilities of the department of homeland security and reduce essential assistance that is provided to organizations at the state and local level. the legislation would be a step back in terms of the progress that we are making in securing our border and ensuring that the communities and law enforcement agencies along the border have the necessary resources to handle crime and to respond to

disasters. with regard to border security, the house continuing resolution would reduce planned technological, fencing and security improvements along the southwest worried about. the legislation would introduce interoperable -- would reduce interoperable communications, it would reduce communication modernization efforts for 50%, making it more difficult for law enforcement to respond to emergencies in a timely way. the house pill woul -- the house bill would also provide funding for 20,500 border patrol agents rather than 291,370 that is -- 21,370 that is senate is proposing to fund. this cutback in border patrol agents i think is -- is shortsighted. the measure would also severely impact aviation security initiatives, the number of advanced imaging technology screening machines, the canine teams, the explosive detection machines would also be slashed

by over 50%. the presiding officer: the senator from new mexico is advised his ten minutes has expired. mr. bingaman: ps, i have several -- mr. president, i have several other points to make but i understand there's a limited time so i will ask unanimous consent that my full statement be included in the record as if read. the presiding officer: without objection, so ordered. mr. bingaman: mr. president, i yield the floor. the presiding officer: the senator from utah is recognized. mr. hatch: thank you, mr. president. in a few hours, this body will vote. this is a solemn responsibility and one that should not be taken lightly. at gettysburg, abraham lincoln reminded americans that those who died on that battlefield fought for a government of the people, by the people and for the people. we are only here because of the people, our constituents, because they sent us here. and every time we vote, we represent them. we represent their aspirations, we represent the dreams of growing families and

entrepreneurs. we represent the interest of taxpayers. of course, not all votes are created equal. some are more important than others. and in my view, the votes that we are taking today are transcendent. they are quite literally about the future of this country. are we going to be a country without a constitutionally limited government -- no, are we going to be a country with a constitutionally limited government? are we going to be a country that limits the burden of taxation on individuals and families and businesses? or are we going to become euro europe? are we going to move toward a full-blown cradle-to-grave nanny government with the majority of americans on the public dole and a small group of individuals bankrolling an ever expanding leviathan state? in short, are we going to remain america, a beacon of freedom to the world? or do we aspire to become a second european union with high taxes, high spending and measly economic growth? again, i remind you that we

represent the aspirations of our constituents. i represent the great people of utah. and i can tell you that they do not wake up in the morning and say, "you know what? america would be much better if we were more like france." this is no exaggeration. right now, government spending is at 25.3% of gross domestic product. and if we do nothing, that number is just going to grow, pushing past 25% and reducing towards 28% of g.d.p. the last time we did that was during world war ii. the republicans and democrats have very different ideas about how to address this spike in spending. either we can step off the pedal, the brakes -- hit the brakes and bring spending back in line with historical levels, levels that respect our constitution of vimentd government and -- of limited government and respect taxpayer citizens, or we can keep the car on cruise control and drive the car off the cliff.

the republicans want to hit the brakes. democrats want to pull a "thelma and louise" with our economy. i, for one, am not going to sit back and allow them to do this. let's be clear about what the democrats and republicans are proposing here. h.r. 1, the bill that passed the house, appropriates $1,2 $1,26,,000,000,000 in nondiscretionary spending. the alternative offered up by my democratic colleagues would appropriate $1,79,000,000,000 in total nonemergency discretionary pending. h.r. 1, the bill passed by the new republican majority in the house, a majority that most closely represents the views of millions of americans who are genuinely scared about our nation's fiscal trajectory, would reduce spending by $57 billion over the current continuing rescontinuing resolu. the democratic alternative would reduce spending by just $4.7 billion. you will hear democrats complain about the draconian cuts in the house-passed h.r. 1.

this is nonsense. the fact is, when you look at federal nonemergency discretionary spending as a whole, which has exploded under the democrats control of congress and with president obama's acquiescence in their big-spending ways, h.r. 1 provides modest cuts. the people of utah and the people of this country understand this, so now that republicans winning the game on spending cuts, democrats are seeking to move the goal post. it is now being suggested that we can bridge the gap between these to bills by going after entitlements and tax expenditures. don't get me wrong, we need to address both, but i can tell the members on the other side now that we are not going to let you shift the debate. this is a debate right now about discretionary spending. this is a debate about low-hanging fruit. last week, the government accountability office issued a report detailing possibly hundreds of billions of dollars in government waste and bloat. there's plenty of fat to be cut in the discretionary budget and

doing so would give our constituents and members of congress the courage to go after even bigger fish. and yet democrats can't find it in themselves to cut an additional $50 billion when nonemergency discretionary spending is well over $1 trillion. some are now proposing that we get into tax expenditures. tax expenditures are a debate for another time. non-defense discretionary spending has grown by 24% over the past two years. we can cut that back significantly. we need to do so and americans understand that going back to 2008 spending levels is not the end of the world. i would also like to correct the record with respect to h.r. 1 and medicare advantage. yesterday, just yesterday, secretary is sebelius sent a lr to the finance committee, senator baucus, that h.r. 1 would have a detrimental impact

on medicare advantage. this assertion is or wellian. the secretary knows well that obama-care cuts $2 billion from a medicare advantage program that currently serves nearly 12 million seniors. according to the administration's own chief act wea these devastating -- actuary, these devastates cuts will reduce enroll in these programs by over 50%. further month, c.b.o. has also found that these cuts would also produce important benefits fo for -- by 50% for seniors enrolled in the program. h.r. 1 is intended to halt the harmful cuts to seniors in the medicare advantage program. suggesting otherwise, as the secretary did, is both inaccurate and it risks confusing millions of seniors. h.r. 1 is a good bill. it is solid and responsible, and i will be supporting it. but it is the only -- it is only a starting point. the fact is, we are going to need many more cuts in discretionary spending. the american people and the people who sent us here have not signed on to the democrats'

project of europeanizing the united states economy. citizens in every state want to roll back spending, reduce the tax burden on families and businesses, and restore america's promise of opportunity and economic growth. my colleagues on the other side of the aisle need to get with the program. we will be cutting spending and we need to cut a lot of it. it may not all happen in the next two years. the american people might need to speak again and send people to washington in 2012 who are accurate -- who will accurately represent their interest. this is a big vote today, and when we look back, i think americans will say it was just the beginning. mr. president, i suggest the mr. president, i suggest the

>> they are split almost evenly between renters and owners. so basically we have housing

costs challenges among owners as well as among renters. their most prevalent among families at the bottom of the scale but their experience by families across the spectrum including families with income between 80 and 100% of median income. my testimony includes some specific numbers about rural communities. we have serious housing challenges in rural communities and we have an increase of about three to 4% in the number of homeless families since 2008 and 2000. i want to take a really good point in my last 20 seconds about the impact of rising energy prices. the cost of living in a place is affected not just by your shelter but by your utility costs and also by your transportation costs. as energy prices rise, affordability is going to get worse. there is a huge connection between housing and transportation costs. families think about them and treat them as a single budget item. who want to address this we will

have to think about how to improve our coordination of housing and transportation policy to reduce the combined costs and improve overall affordability are i'll look forward to your questions, and thank you for the additional time. >> thank you, mr. lubell. can you discuss the structural barriers to the housing recovery that may exist in the financial system? >> there is right now, of course, great deal uncertainty about the future structure of the housing finance system. and while that may not be weighing on housing prices at this moment, as we go forward that is likely to be an increasingly important factor in

the uncertainty of the future of housing prices. i'd like to reiterate that housing is different than most commodities and goods in that it is an asset. this price is very determined by households expectations of the future. so for example, future scarcity of housing finance would impact housing prices today. >> mr. lubell, are there barriers to financing affordable rental housing in the current market? if so, how could these be overcome? >> the short answer is yes, there are barriers to financing affordable housing, particularly affordable rental housing. but also owner occupied housing. to some extent they are starting

to resolve themselves. the market for equity, for example, in low income housing tax credit has rebounded. but to continue to be difficulty on the downside. and one of the things that is really helping is the availability of credit through fannie mae and freddie mac. i know it's not popular these days to talk about the benefits of those entities, but one of the things that those entities are doing is helping to ensure the availability of credit for affordable rental housing, particularly at a long-term fixed-rate of interest which is extremely important for financing and affordable property. and those entities and their lending has actually on the multifamily site, site, although multifamily side have not incurred the same losses that we've seen on the single family site. so just important to understand that. i do think that one of the problems we have is the number of families that need assistance

in terms of affordable housing has gone up the show by these charge. there's not a subsidy of able to fill the gap to what the market can pay and the cost of actually building those homes? homes. so that the continued interest as how we meet the growing challenge of affordable housing in america. >> dr. calabria and mr. phipps, you discuss an idea that potential homeowners are not entering the market and are creating a shadow demand. would you explain what factors that include to help absorb the excess housing supply? first you, doctor grow. >> several things, one is the jobs. young people have not yet moved out of their parents home or have remained as roommates are unable to because either they'll

have a sufficient income for they have no income. and so return of consistent job growth will be the first thing. and the second thing is some clarity about where the housing market is going. i think jeff is correct that we will continue to see rate increases because we are not building enough rental units to keep up with the demand. so rents are going to go out. that's going to retard the continued delay in household formations. and as house prices remain uncertain, that's going to retard those folks are moving into a whole because they don't want to buy a home, and susan mentioned, and till they are sure of the long-term sustainability of that house pricing. >> mr. phipps? >> senator, the interesting thing to me when we testify is that four of us use the word fragile to describe the market. and i'm struck by the part where we say handle with care. the problem is the media treats

real estate as a single market across the country. it is all local. one of the things we need to get back to is what's really going on in the local market and understand the financing sources are, in fact, national. but the challenges that we are faced with right now is a lot of people who should be able to obtain financing are able to, when fannie and freddie have credit scores the average 760 up from 720, with 50% of the market that could help absorb that shadow inventory. there's a second piece of the shadow inventory, we would like to get out and resolve, we can go back to normal stable dynamic market here but there is an opportunity for short sales in the market which just hasn't been realized in an effective way. that is clearly better for the investor, and actually in most instances better for the family. the investor ends up losing 37% of principal on average versus 50%. but the process of getting in a short sale approved in a timely

human fashion is just nonexistent. in the final point i make is, we need to understand mortgages and finance universally. it needs to be something people understand. and i believe the consumer understands their house and understand what they are buying, but they still of great difficulty understanding what the 100 or 150 pages of doctors they signed closing, which by the way they're told you need to sign the to or you will not get the house. that process understanding and cover any what happens the is really important in order for us to get back to a normal informed market. at the end of the day we need to get through the overhang. we need to have the excess inventory result so the market does what markets do. and, frankly, there will be price stabilization when we get beyond that. >> senator shelby. >> thank you, mr. chairman. dr. calabria, some housing

interest groups have called for more regulations to govern the foreclosure process, which would lengthen the time to complete foreclosures. some have even called for a foreclosure moratorium. what would be the consequences, in your opinion, of these policies on the housing market and the economy? >> in the aggregate we would delay the adjustment of the housing market to reaching an equilibrium come of getting inventory out of there. so i'm very concerned that while we need to deal with those, the passenger of those who can be helped we need to move quicker practical support to keep in mind that somewhere between 30 to 40% of the foreclosures are on vacant properties. those properties don't do anybody any good sitting in those properties make it. so i would say what we need that is more a two track approach will refocused on those who can be helped, but those who will not be helped, that needs to be sped up in the process needs to be quicker. i also want to comment very

quickly on a couple of things the chairman mentioned, which is we need to keep in mind that we all want to get back to normal market but when you do their 2005-2006 were not normal market your they were housing bubbles. and i believe professor walker mentioned, about 2002-2003 that was more like a normal market except for the market refinance boom in 2003. >> but going back to that is pretty slim a help. >> in the short term yes, but this is a country where we've had a long history of housing bubbles, every 10 to 15 years. i hope that we've learned something this time around but i'm not convinced of it. >> dr. calabria, has the force of the prospecting homeowner been lost in the discussion what the government can do to mitigate mortgage foreclosures? >> i think this is an important point. i certainly friends who tried to buy short sales and homes there in foreclosure and had those transactions fall through. this is an important thing to keep in mind which is anytime we

tried to push up prices artificially we're simply trying to transferring wealth from potential buyers to sellers, and i sorely don't think that's a legitimate -- >> are weak in to bring in the market? >> we are. we have to have the market find a price -- i would reiterate to meet a fundamental way of getting that demand out there is to get prices to the point where buyers just don't believe they can go any further down. right now i would have concerned that potential buyers feel like if they buy something today they will lose money on it. there's a little bit of wait and see. we need to get past that point. >> dr. crowe come in your testimony you state that the national association of home builders urges congress to agree to definite solutions regarding the future of the government-sponsored enterprises. accept any need for a readable transition period and understanding the deliberative nature of congress, would you agree that congress needs to begin considering how to reform

the housing finance system now? >> senator, the simple answer is yes. we do need a solution to this. however, we do need to understand that fragile nature of our housing market and have a transition. and i would also say that nahb also supports some ultimate backstop by the federal government in order to maintain a 30 year fixed-rate mortgage in this country. >> i want to get into the hamp program. the hamp program was promoted by president obama as a way to help three to 4 million struggling homeowners. today, the program has put only 522000 people in permanent loan modifications. by contrast, nearly 800,000 people dropped out of the program. this is significantly -- signet significant i think and

disturbing because of the special inspector general of t.a.r.p. recently pointed out in testimony before the house financial services committee, and i quote, he says, failed trial of modification off and leave the barbers with principal outstanding on their loans. less home-equity, deplete savings and worst credit scores. dr. calabria, do you agree with his analysis the? >> i think inspector general is one of% correct in this, and i do think we need to be concerned. that many other people have been through these modification programs have come out worse than they have gone. i think it's important keep in mind that we simply have not or even blasted ministrations either has not put forth a baseline and we don't have a discussion over who shall we help them with every small number, what's a reasonable expectation. >> is that a good use of the taxpayers money? >> i question whether it's been

used effectively. >> mr. phipps, in your testimony you state that frequent increases in fees from both fha and the gses and credit overlays from lenders will unnecessarily increase the cost to home buyers and discourage these consumers. who can't otherwise afford a mortgage from participating in the housing market. in both cases, these were existing fees designed to protect that taxpayer. if these reasonable fee increases deter a consumer from buying a house, does this not indicate that the person is better off renting perhaps? and do you support charging actuary or sound fees at fha and the gse to prevent further government attacks bailout? >> the short answer is that we believe the fha serves a

specific purpose. and it is filled the void in the market that is a larger percentage that it has historical appear to have been actually several increases recently on fha. each time the increase becomes higher. there has to be a balance between cost and benefit, and we welcome the conversation and that analysis. in the short answer we think the stepping up of costs need to really reflect to demand that the market will support. and if you raise that first level of the latter too high, people don't get on and we have further got my sing of overall value. it is woven. it is absolutely welcome. we would like to get back to normal market where people can sustain the mortgages have absent to mortgage money to enjoy the gift, the benefits of homeownership. >> mr. chairman, i have one last question if you will indulge me. dr. calabria, and your testimony

you state, and i'll quote, uninformed is the primary driver of mortgage to link with the. previously this committee heard testimony on dr. paul of the federal reserve staving, i'll quote him, when home prices fall, some borrowers can no longer profitably sell. and many income disrupting life event really takes a toll. one of the lives events he referenced that dave was on involving. does this analysis mean that the best way, and there are other ways, but the best way to help homeowners is to spur economic growth? >> i would absolutely agree with that. i think a significant amount of the problems in housing and mortgage markets would go away if we brought unemployment and significantly. >> do you disagree with that, dr. crowe? >> no, senator. >> what about you? [inaudible] unemployment and employment growth is a major driver. and, in fact, we need to

strengthen it go to the housing market recovery. >> thank you, mr. chairman,. >> senator menendez. >> thank you, mr. chairman. thank you all for your testimony. i want to talk about liquidity in the marketplace. and it seems to me, and i'd like to get your perspectives on this, how do we get banks to commit to lending or real estate projects again? particularly, you know, right now it seems to me that except for a very high asset class, for example, which attracts institutional investors like a luxury high rental market, certainly in our area in new jersey, other than that, you have underwriting criteria on lenders where projects that are performing, barbers that, in fact, have current debt service

fully current and have not had a blip in the process, ultimate finding themselves because they don't appraise today at the level of the loan closing, totally, you know, stopping projects in the middle of a project or even though the loan is performing. so, i look at that liquidity issue and i look at the flipside of the liquidity issue on the consumer side, and see the changes in the underwriting criteria which certainly understand legitimate changes to ensure that we don't have people buying homes they can't afford. but by the same token, you know, if we've had a 25% drop in real estate values, but you could get a 10% down based upon your income, and that would be, take whatever price level you want, a $400,000 home which $40,000.

now you have put 25 or 30% down so that anywhere, you know, nearly $100,000. ido niemi people have $100,000 to put down on health. i wanted from the perspective how do we deal with this challenge of the liquidity crisis both for the actual moving forward in the market by those who develop it and from the consumers who seek to purchase it? >> i'd like to take the first stab at that but i appreciate the question. on the production side, on the builder side, the builders are having that difficulty. we have been serving builders for six or seven years through the boom and into the bust, and what we find is the greater and greater percentage of them are being turned down at financial institutions. and that is their source of loadable fonts. elders are small companies and to go to small banks to borrow

and they can't get that money. we've gone to the regulators and we say there's something stranger. we don't see any differentiation in banks response between the markets that are in good shape and the markets that are not. we understand why the bank might say no in a market that is overgrown with excess inventory, but we don't understand why they are saying no in the market that is showing some signs of recovery and people want to buy a house. and we don't get satisfactory answers from the regulators. so, in fact, any hp will be presenting regulation that we hope you will consider that speaks to some of these regulatory overreactions, things like making guidelines absolute so that the regular has guidelines, and yet it turned them into absolutes so there's no breaking those barriers. or evaluating properties,

developed properties at their distress level instead of at their buildout level. there will be that buildout level eventually but we can't seem to convince examiners that that will correct itself as that market corrects. regarding the payoff of loans, when its current but to celebrate has not been the same as it should have been, and, therefore, the bank is suddenly decided that they want their money back even though the builder is making regular payments. they just don't have the same sales rate as they promised. and then finally, we'd like to see the sba loan system more friendly to homebuilders. it is not a useful program to homebuilders right now. >> anyone else? mr. phipps? >> if one starts with the observation that many banks tend to essentially be spread lenders, we all recall the sort of borrow at three, linda six

and be on the golf course at three, that's no longer the case but there's a degree of truth to. it. my point being, if we also start with the observation that despite the financial crisis, ensure depositories, the balance sheet is increased throughout this crisis and ensure deposits increased. what they don't however it's great to change what they are holding onto balance sheet. part of this is their incentive. we set up a situation where you can essentially borrow from the federal reserve that near zero, put it in treasuries, earn a very nice spread that is absolutely risk free, and part of that, if you look at the decline in small business lending and commercial bank it almost exactly equals the increase in bank lending in terms of government debt. so we swapped out who we have led to. what i think is important is we need to change the incentive system of banks and i think we need to question as well by the federal reserve has an interest on reserves to get us out of this crisis it doesn't make sense in a situation where

there's liquidity getting out of the economy to pay interest on reserves. we are encouraging banks to hold excess reserves. it's important to keep in mind commercial ensure depositories of a trillion dollars in cash just sitting around. so there's not a lack of capacity. it's really how do we change the incentive system so they put those funds into risk-taking, like construction but also the small business and other things. i think we need to look at monetary policies and what the fed is doing. >> the only thing i would add is on the consumer side, your fica scores become a quick look of your s.a.t. scores. and if the fico score is below a certain threshold the lender doesn't look at you in a holistic approach. we need to get back to commonsense holistic lending where they take the amount down, the whole financial profile of the potential borrower when analyzing whether to give them financing or not. you don't need 760 as a minimum score to be creditworthy and to

be audible everything back the mortgage. the pendulum has swung so far that the rate of default over the 2009 instruments of mortgages that were issued, is a 1.2% which is well below the normal we would've seen in early 2000 range. so getting back to medium is important. we have a meeting with lenders, meeting with fannie and freddie, fha, to say please, bring it back to a centrist commonsense sustainable criteria. we are discussing the impact as quickly as we would like. 15% of the market come if we move from five to 5.75, that's a lot of transactions and a lot of jobs. at the problem still is very, very much present in the marketplace. >> thank you, mr. chairman. i have question for the record for mr. lubell. my time is over, i would love to see your answer on. we look forward to seeing your legislation and working on trying to change this dynamic because i don't think we're going to move the housing market

and till we get the regulators moving in a different correction. thank you, mr. chairman,. >> senator merkley. >> thank you, mr. chairman. i will continue on in the conversation about credit. and specifically, mr. crowe, your testimony you noted most important for the nation's small homebuilders, congress, regulars and financial institutions must work to unblock acquisition development and construction lending channels. i think you mentioned that you may in the near future have a legislative proposal. i just wondered if there were some point you would like to preview for us? >> thank you, senator. i was given an opening by senator menendez, and so i took it. in summary, what we are looking for is for congress to throw its weight around, if you will, because we haven't had any success in convincing the regulators that there seems to be one systematic regulation

concerning homebuilders throughout the country, even though, as i think you heard in testimony today, the markets are dramatically different across the country. and so we have recovering markets in texas, for instance, and some other states. and not so recovering and other states. and yet we see no differentiation in the ability for builders to borrow. so what we are looking for is a little more sanity to the regulatory oversight that would allow financial institutions who tell us they are perfectly comfortable with lending to real estate in certain markets, are being told no by the regular. >> and so it isn't essentially a cap on the percentage of alarm for photo that can go to homes? >> yes. at several points but one of them is a guideline of no more than 100% of capital going to real estate is a guideline that nevertheless being used as a hard and fast rule. so if an institution has that

much load on its dollars books already, it can no longer add any even though there's another good one out there. >> an individual is telling me on commercial building, went to get a real estate loan for the building and in the end of the bank did it as a non-real estate loan, essentially forgoing the collateral which was an insane decision from a commonsense point of view, but as a result of this type of caps you're referring to. mr. phipps, i really appreciated your point about the intangible value of homeownership it isn't certainly something that i feel strongly about, but do you want to mention what you consider to be the intangible benefits of? >> at the end of the day we all need shelter. so we need a place to live, and when you look at the benefits, talking about skin in the game,

senator, and i get entertained by that. skin in the game is a down payment. skin in the game is my name on that deed sank i own that property, but i have an investment for my family. now, we got away from the discipline of taking out a 30 year mortgage and paying it off. but that's the concept. it worked for my parents. it worked for my grandparents. we need to go back to that but that's an asset that really has a lot to do with my sense of place, of accomplishment and self worth and to society. we as realtors are committed to the concept of self-reliance. we believe that homeownership is a prerequisite for that. when you look at the benefit for a neighborhood, for community, for test results, et cetera, they are all plus. we watch it with great caution against this government has made a historic commitment to homeownership. we think and the highest

purpose, for over 100 years, and the game has been played this way for over 100 years, so we are very anxious about any effort to reduce the number of baseball bases on the diamond, or change the number of innings or change the number of outs. because we think homeownership at the end of the day is right for our children and grandchildren. >> thank you very much. and i really a code that. i certainly saw in my work with habitat for humanity and other worked in homeownership that the fact that one has the ability to have freedom of choosing to do what you want on the property no longer is a rule about what color you paint the house, no longer is there a landlord to call when something is broken, you have to take responsibility for that, huge positive influence on the children. this ability, and you mentioned test results. study after study showing children do far, far better with the stability of families with homeownership, more likely to graduate from high school, more

likely to go to college, more likely to have higher incomes, more likely to have lower dependence on any future public payments which saves, is not just intangible. that is tangible. that is a real, real benefit. and it bothers me to hear folks saying that we shouldn't press for homeownership in our society, especially because what they're responding to is the impact of predatory mortgages. and if the family was unsuccessful on a predatory exploding interest rate mortgage that doesn't mean it would have been successful if they had been offered a straightforward prime fully amortized mortgage. i wanted to, in that sense, one of our major programs for homeownership is home mortgage interest deduction. and it's a very valuable program over the long term to reduce the size of payments.

one thing that i have been interested in is more help out the front end. and that is, for working families often the home mortgage interest deduction provides only a modest amount of assistance, especially when interest rates are low. just a crude example, a $200,000 house, 10% down would be 180,000 mortgage, by%, $9000 a year in interest and your first interest. 9000 for couples thus the standard deduction. so that couple would not actually get any benefit from home mortgage interest deduction and less and additional expenses. and if they did it would probably be a modest amount. ..

somewhere around $5 billion a year we help a lot make that transition in homeownership and in the short term, it would help absorb the excess inventory several folks have mentioned. i thought i would invite you to share thoughts about that. >> we studied the proposal and are intrigued by it. the experience of the tax credit, destabilizing the market, in australia we have exactly that program working extremely well. you preface the conversation with mortgage deduction and we're very sensitive that that

is the ultimate thing we can defend but we certainly support and encourage programs that provide home ownership and opportunities for that. >> from the home builder's point of view anything about that? >> down payment is the single biggest retardant to get into a home so any assistance, we still favor a higher loan volume and lower down payment mortgages with the appropriate premiums paid for the risk so if there is another way to subsidize the down payment through some tax credit we would certainly be supportive of that with the caveat that we still believe mortgage interest deduction is very important to the broad base of households. >> there's one other rushing that is disturbing for me in the conversation about down payment. the assumption that someone puts

5% down. the closing costs to the pri run between 3% and 5% additional. we talk about the down payment we need to add the real cost the homeowner has to bring to closing for that happen. it is more than 5% or 10% or 20%. it is that amount plus related closing costs. >> point very well taken. and i am over my time so our follow up with additional comments you all have. thank you. >> thank you, senator berkeley. the housing market has several challenges to overcome. we took the initial steps in underwriting standards and risk retention but we still have work to do. i look forward to continued discussion about the future of housing and middle-market in the coming weeks and months. i am hopeful that as we explore the path forward we will find

more areas of agreement than disagreement. it is essential that we get this right for sustainable housing market for american families. thanks again to my colleagues for being here today. this hearing is adjourned. a [inaudible conversations] >> the homan security committee will hold a hearing tomorrow on the american muslim community and what it calls the threat of islamic radicals living in the united states. chaired by congressman peter king, of the panel will hear from the only muslim serving in

congress, minnesota representative pete ellis and. live coverage starts at 9:30 eastern on c-span3. the organization council on american islamic relations has expressed concern about the hearing and when they held a news conference. we will bring that to you before the live hearing on c-span3. that is 8:20 eastern and online at c-span.org/video library. now conversation with microsoft chairman bill gates. he discusses his philanthropic organization, called the bill and melinda gates foundation. his career at microsoft and global healthcare. david rubenstein, co-founder and president of the economic club in d.c. moderates this 1-hour discussion. >> we're pleased and honored to have bill gates as our special guest. as i said at the outset, this is in 25 years the biggest turnout

we ever had and i don't think it is because the interviewer skills were so great. it is because everybody wanted to hear bill gates. i think the reason is because of his extraordinary accomplishments over so many years. the don't think he needs and a leopard introduction by would like to make a couple points. today he is the biggest collector past and greatest philanthropists in the world. he has given a $30 billion of his own money -- [applause] -- to his foundation and that foundation has given away $24 billion to causes we will talk about including k-12 education in the united states and health-care in the developing world and he has become not only a big donor to these clauses but somebody actually committed and knowledgeable about the causes and with the intelligence and

dedication and focus he brought to his business career earlier. his business career is also legendary. he left harvard in the 1970s and started a company later named microsoft, built it into the largest technology company in the world. at one point it had the highest market value of any company in the world over $600 billion. in doing that he revolutionized the computer system we have in our country and revolutionized software and everybody here has used the product of his company, microsoft. he served as ceo of that company from 1975 when it was created to 2000 when he stepped down as ceo and from that period of time he managed to become in addition to a successful entrepreneur and businessman and ceo of the wealthiest man in the world and by far the wealthiest man in the world. today is one of the wealthiest men in the world.

forbes today said that he is only the third wealthiest man in the world today with a modest net worth of $49 million. had he not done what he has done in bird his net worth would be $88 billion. really nice number. it is one thing to make a good company and another to run a company and another to make a lot of money and another to give away. what bill gates has done a throughout this has managed to keep his feet on the ground, his ego and check and made himself a very humane person and very personable person and made himself accessible to people. what people admired about him not only is his extraordinary a couple today philanthropy and business but also the person he has let so many people know. what i would like to do tonight is not only talk about the foundation, his philanthropic work and business career but the things that make him so human

and interesting to talk to. let me start by saying thank you very much for coming and i wondered if you ever thought what you could have made of yourself had you finished college? [laughter and applause] had you not dropped out of harvard would recommend to your own children to drop out of college, do you think you could have built the company or was dropping out of college that made the difference? >> paul allen who is my co-founder and i saw the first computer on the cover of a magazine and we had been talking about the miracle of the chip for three years by then and we were going this is going to happen, this is so important, so when that product was announced

this point and i got to work with some brilliant people and learn a lot more. people who worked with my senior in high school said you should

skip college and get a ph.d.. i went to my parents and said i think i'm going to skip college and they said you should go to college. that is good advice. in terms of social development, i never finished -- it really helped -- >> you were in high school you prepared a program that enables you to get in classes with mostly girls so you had a better chance of meeting girls at that time. is that true? >> i wasn't very good at meeting them but they were nearby. and they tended to be the better looking girls for some reason. that is the beauty of being in charge of computer scheduling. i decided when the classes would meet and who was in class. it with a semi complicated software problem and they were supernice to let me do it and they paid me money to do it.

that was a great position. >> a couple years ago you were given an honorary degree at harvard and you said you told your parents you would go back and get your degree but in your speech, you said you were assigned to live in what is called the yard and you wanted to live there because there were more girls in that part of harvard and he would have a better opportunity given the fact there would be so many geeks in that area and you would and should -- ouch on the rest of those people but you said it didn't work. >> my freshman year i live in the yard. my next two years were up there. i had this 50/50 ratio. i knew 3-1 -- 50/50 didn't do anything for me either. it was at least a better background for studying.

>> when you started your company did you ever have an ambition to build such a large company? what was your ambition? did you have a business plan that led to something like microsoft becoming what it became? >> the interesting thing is we always had a contradiction in the company plant which was we said there would be a computer on every desk in every home running microsoft software which is up plan for a very big company but in terms of our practical, what we thought about, i would constantly be say no customer pays me for a year. can i meet the payroll? i always had cash on hand because -- eight did not pay us in full. it is a flaky business with people coming and going. fortunately radio shack, apple and a few other ones, we are putting one foot ahead of the

other. my plan is to double. clearly we can double and we have 100 people, 500 people, and we are being very realistic. and what the income would be. the intel people, we might be on this thing. it brought the contradiction of the vision, and the next doubleing with focus -- >> i you building anywhere other than your home town area beaches it was not considered a center for this kind of activity. >> that was a real decision. our first customer when i dropped out of harvard was in albuquerque, new mexico. i learned how to spell that,

went there, and we were hiring people, 15 or 16 people. it was not the easiest place to hire people. then the first customer, we knew we had to move to silicon valley and we were worried about traffic and loyalty. and so much business in asia. to move back to seattle, anybody in the company wanted to move back to seattle. and we could create a loyal -- it was completely out of a computer game. the computer game traditionally was on the east coast, boston was the biggest part of it and

almost entirely in silicon valley. >> in march of 1986, you became the youngest billionaire in the united states at the age of 32. is that close to right? >> we went public but within a few years of going public the you kept going up. >> when you became a billionaire and relatively young age, ready 30s how did it change your life and you did you find people treat you differently? did your parents treat you differently? >> i would order cheese on my cheeseburger without hesitation. hy was talking to my dad once and he said it must be tough that his son makes more money than he does.

my dad said oh you make more money than i do. i was the best customer of his law firm at the time and subsequently i have done very well for the legal profession. i was fanatical. between the age of 18 and at least 30 high was totally focused on microsoft's. and didn't believe in vacations, and let other people take them a little bit. i knew everybody -- when they came in in the morning or left at night. i was so excited and thrilled by the work we were doing and wanting to stay in front of it that the notion of the company wasn't that interesting. sometime in my 30s, an article about giving it away, giving

wealthier kids, not necessarily a favor to them and i remember reading that and thinking that is something i will have to think about some day. i was 38 when i got married and did have to think of it. >> you married someone who not only had two college degrees but the advantage of having them from duke. and as everybody knows she is your partner and the foundation is called the bill and melinda gates foundation. how does that work? do you have to agree on everything? did you sort through the gifts and how do you decide what your areas of focus our? in the foundation of? >> she is an equal partner. to have a project that is complicated. she knows when i get overexcited about something she thinks about the people, she is great and she is more in depth and by person, we learn from each other. we do at least a couple trips

where we go together. in today's one will go to india and three or four trips where each of us go somewhere and get back together and explain what we found. it works very well. she knows some of my weaknesses and very helpful with those things. she got on air force one before i did going to education in boston. >> when you got your foundation off the ground in a significant way you had an earlier foundation with a jump start, $20 billion at the outset. what was it like to write a check for $30 billion. >> microsoft was the value at over $500 billion which was an unusual number.

this is a good time -- that went into the foundation end over a period of time those were sold. what happened was my dad was retired from his legal career and a microsoft executive had his own retirement and they were talking about working together and i thought given that i am still so focused on microsoft and don't have much spare time, these will do a pretty good job. on started to learn about vaccines and our underfunded they were and what a miracle they were. i learned about reproductive health. having those people get funding made sense. when you create a foundation there is 5% minimum payout.

we created these and had to ramp up pretty quickly to spending that 5%. >> you retired from microsoft essentially in 2008 and you are still the non-executive chairman but you are -- 100% of your time is philanthropy. how did you decide the two areas you wanted to focus on were k-12 education in the united states and health care in the developing world? which subjects did you not pursue? >> our main focus would be whatever the greatest inequity in the world is. that is where we pick global health. we saw that because the poorest people don't create a market there's not much research into things like malaria vaccine and yet if you get those vaccines they could be delivered

anywhere. they are delivered every place on earth with no government, and they have an enduring effect which is worth a lot. but also reducing sickness. the majority of kids in africa never develop above 90 iq because they have infectious disease which means their brain doesn't fully developed. that holds those countries back in a huge way. parents who have healthy children should have less children. so all problems, if you have too many feeble, feeding them, the environment, everything that counts is impossible. so that became our number one thing. that we said we should pick a problem in the united states because it really was the incredible education system and stability and the brilliance of

the american system that allowed us to learn and allowed microsoft to exist and allow berkshire to be built and so we give a little over a quarter to you as education because we wanted to have a global cause and a domestic cars. we have added something to help poor people in agriculture, modern sanitation. >> you must have everybody you see must be asking you at this point in your life for money in some clever way or subtle way so you must have gotten used to that. how do you respond to so many people who say go see the foundation. how did you handle everybody asking you for money? >> there's a lot of interest in raising money. if you tell people what your focus is, it is about global help for poor children's, saving their lives, it is about

improving the education system we are interested. it is almost -- it is very likely that someone else will do that. we have some degree of focus to build up expertise and see where we are going wrong. the general foundations if they did half as many things they would be better off. they would do them with more measurement, more of a learning curve. it works out ok. i can say no. warren buffett taught me how. >> you mentioned warren buffett and berkshire. you had a relationship with warren buffett for a number of years and one day he called you and said i want to contribute your foundation. how did that come about? >> an unusual set of circumstances. i met him on july 5th, 1991.

my mother said that warren buffett was coming over and i said come beat him. i said i am busy. i was feeling fanatical at that point. she said you have to come by. i said he buys himself fox. somehow he knows that. that doesn't really add to human welfare. but she said i should come. so i went and met warren and he started asking me questions about why didn't ibm do what i did, why couldn't people see where the computer industry was going, these are questions i always wanted somebody to asked me. i got to ask him about various

things about the business. we became pretty deep friends. we played golf together, played bridge together, we box and had a chance to talk. then tragically his wife died in 2004. his plan was that he would make the money and she would run the foundation and most likely she would outlive him and have lots of time to do it. when that wasn't going to be the case warren completely to our surprise decided to form five foundations, a substantial portion, 85% or something like that going into our foundation. that was fantastic. but completely unexpected. >> when he called and said he would give you $30 billion or something what was your reaction? >> he is really serious about

this. [laughter] he said to me at one point, after his wife had died he said the logical thing to do would be to give this money to your foundation. i said maybe. but he wasn't suggesting it would happen. he was suggesting it wouldn't happen. he was brainstorming. he said that would be logical. i said maybe. then three months later he called and said i am actually doing that. i said you are doing what? i want to give a large part to your foundation because i like to delegate things. he has picked the very foundations -- >> i like to have your name on

your foundation? >> no. at first he was saying he doesn't even want to be a trustee but he said it was unusual. i said to my wife melinda, call and ask if he really means that. he said it and a different way. he would like to be a trustee but that is -- he has been totally supportive, gives advice, helps us think about some of the tough issues we face. it is a lot like he treats the managers of his businesses. he knows they love their work. he knows they will do their best. all those people want because they admire warren and want to do good work for him and they know he is available to provide advice. >> you had a great career in business in philanthropy. how the you compare the intellectual challenge and excitement out of these two

types of endeavour's. >> microsoft had three faces. there were the early microsoft days. i got to write a lot of code. nobody wrote lines of code about it. there was a certain perfection. everything had to be in the right place. that was very cool. he had to step back. you have to adjust to a more direct way of contributing, when you start doing that. it is a lot like that. jerry similar. scientists working on malaria

vaccine. and other than the antitrust trial -- whatever you call that, most things were more of an engineering type of fishing. when you got right or wrong, kind of have this excellent the correct. on some of our science stuff with the foundation is more like that. where you either have it or you don't. the beauty is if you invent a new vaccine, no one will invest it. if you invent the way teachers should be compensated or evaluated, that will come and in tennessee in the 1980s they had a pretty good system that lasted five years and was abolished. ..

>> doing and just pretending that it's the real -- [inaudible] so there's actually a processer in the keyboard that when it gets that funny sequence, it does a hard reset on the computer, and so you know that it's the boot software. anyway, we could have picked a less obscure sequence, but we didn't want them to be confused

with normal key strokes. for a while people wanted there to be a special button on the keyboard, but as the keyboard was further away from the computer, we came up with that. so maybe we could have done better. [laughter] >> i have only one other question which is, why can't you have software -- maybe you do in your program -- where if i send an e-mail to you but i don't want you to send it to somebody else, you can't forward it? right now, i send an e-mail to you, and it goes all over the world. how do you prevent that or can you? >> yeah. actually, you can have e-mail that cannot be forwarded. the second thing is you can have e-mail that can be forwarded, but the originator sees the forward of every forward. so the originator can see exactly what's going on. >> i got it. >> you have to notify people that that, it's a trace e-mail like that.

the -- to some degree as soon as you send somebody an e-mail, in an extreme case they can take a photograph of their screen, put that in a scanner and e-mail that photograph off to people. so once it's in their brain and they can retype it or they can do the photo, you can't guarantee information doesn't leak out. and be so there's never -- and so there's never, you know, a perfect system, but there are systems that make it a lot easier to stop people from -- >> i see. >> -- forwarding them. >> back to those days for a moment. when ibm was looking to have somebody provide software, i think you won rfp or you were selected, and what was it like to get ibm to select you? was that -- were you competing with a lot of other people, and did ibm -- why did ibm not say we want to own the software that you produce for us? why do you think they didn't want to own that software? >> yeah, they, they weren't serious about personal

computing. ibm became a company with many locations, laboratories, and one of those was boca raton. and boca raton did a product that was a complete bomb, a complete wipeout. they had all those engineers sitting there. so some genius up in headquarters decided, hey, we take four years between when we conceive of a product and when we get it done. we should try to get that down to a shorter time period. so let's just take some random product and see if we could get it done quickly. and boca, so there was a kind of rfp at headquarters for labs to bid to show they could use new technology. so boca said they would use outside vendors, they would use intel for the chip, us for the software, and they'd get a product done in two two years. and it wasn't that important what the product was. the forecast was to sell 200,000

of them. it was not a major project, it was just this thing they were doing. and they thought of it as a toy computer. it had an optional disc, but it didn't have a hard disk or anything. this group at boca raton was a very good group, it was fantastic working with them. we made the thing more powerful than headquarters understood, but that was the magic of the microprocessor, and we wanted to do that. what happened is this thing ships in november 1981, and it just sells like mad. very quickly, it sells over a million machines. well, the other divisions at ibm, there was a group that did the beta master and another group. those two divisions said, these guys are out of control, they're messing up our market. they're messing up business computing and word processing, so they both bid to take over the division down in boca and they said, remember, these guys

are morons. [laughter] >> right. >> and headquarters said, hey, wait a minute, this boca thing is pretty dynamic. so they took this guy, don etheridge, who ran the pc division, and they put him in charge of those other two divisions. [laughter] >> right. >> and so ibm in some ways, like many companies, they were actually fairly enlightened about a lot of key steps, and other key steps they weren't. the particular contract we had with them was we were very explicit that if anybody else does computers, you know, we need to make more money than we're making from you, ibm. you didn't pay us enough to keep us happy the rest of our lives. you don't own our company, so we have to be able to sell to other people. and they understood. they understood that we had kept that upside. the nature of the value of that, there was one guy at ibm who objected to their contract. he actually thought, hey, maybe

we should do this. and he was overridden. well, later he tried many projects inside the company to replace us, but they just -- they weren't fanatics. >> had he not been overridden, that was the most expensive decision ibm ever made, i assume. >> yes and no. the ibm pc was not guaranteed to be successful. there were lots of personal computers, apple, radio shack. what happened was that sort of generational leap that the group at boca boca raton and we decid- and intel was part of this -- decided to move them up to a slightly more powerful machine. and because it was good and it came from ibm, it became a template. now, i believe 16-bit computing would have happened and, you know, even if ibm hadn't been part of that. but it's hard, it's hard to go back and, you know, consider those other pathways. you know, ibm, you know, did very well. they made a lot of money on

personal computers for a long time, and then eventually sold off that division. >> but it was, do you think had apple licensed its software to people many those days they -- in those days they didn't have open systems, i guess, open architecture, so they didn't license it, do you think that would have made a difference in your company? is. >> we actually told apple they made a mistake on the mcintosh not licensing it to other companies because we had applications that ran on the mcintosh. strangely, we made more money than a mcintosh was sold than we did when an ibm pc was sold. the dominant word processer and database on the mac were the software we had written, so we kept telling apple, please, license your software. it's the only way you can get the scale of economics. now, the irony is that, you know, they fired their ceo, they brought steve back. they've continued on the model of building their own hardware, and they've made it work

fantastically not only for their computers, their tablets, their phones, so you can it on your own, but it's just a different model. the microsoft model is for the hardware models, and the apple model is to do their own hardware. >> okay. now, when you wrote your first book about your company and your life, i don't think you mentioned very much the internet, it is said, in that book. maybe i'm wrong, but -- and did you foresee the internet coming along, or did it surprise you how important it became as part of the whole computer generation? is. >> yes and no. it's easy for this to sound not humble. [laughter] the book talks -- the book "the road ahead" talks about the information superhighway which was the stupid term at the time, it sounds very antiquated. but yes and no. the internet is the this mind blowing thing that has completely changed the rules for

everything. so there are some elements of it that all sorts of people in the computer industry were talking about for a long time. now, we kept expecting it to happen, and it never happened, it never happened. and then all of a sudden it took off. and so i don't think any of us sort of realized why it didn't happen for the five years before it did. then, of course, once it did happen it's one of those unbelievable phenomenons. the more people that are connected, the more people want to get connected, and these idiotic investors completely overinvested in the these internet companies. they sent $100 billion of silly money to try companies like google, aol, ebay actually survived, but the net return on that money between 1996 and 2001 of building infrastructure and building web sites, you know, 90% of them were laughable like a sock puppet.

[laughter] type thing that people invested hundreds of millions into that thing. [laughter] anyway, that phenomena was mind blowing because it had such a powerful dynamic. so, no, we didn't see that. some of these applications were what we and everybody else were why we were doing the personal computer in the first place. >> now, in your current position you can see almost anybody in the world, i assume, and i assume you're not turned down for a lot of meetings. [laughter] but who would you say are among the most impressive, you know, government or business leaders you've met over the years? are there people that stand out as being so talented or so far-sighted that you can remember what they said to you or you're very impressed with them? >> well, i think warren buffett probably gives me the best advice about the world of business and how things are going. you know, i'm constantly learning from warren because, you know, he's just amazing.

and he puts things in a simple-to-understand fashion. i've gotten to meet a lot of great political leaders. nelson mandela was probably the most inspiring and because if anybody had predicted what would have happened in that power transition, they would have predicted lots and lots of bloodshed and, really, i think it's his unbelievable insight, his personality and his, that thoughtfulness applies to lots of things. so he's been quite amazing. i still have a soft spot for scientists, people who just spend their time taking a problem, you know, like designing a new toilet which is not a very glamorous problem, but you can actually have this huge impact on humanity. designing a better wheat seed for africa, designing a plant that makes its own fertilizer. some of these ideas -- [inaudible] there's others where people are

going to toil their whole life. some will work out, some will not work out. so i always love finding somebody like that who's doing great work. >> let me ask you, you've met a lot of political figures, and you're in washington today, i guess, meeting some members of congress. has it ever occurred to you that you could do their job better than them, and have you thought of running for office? is. [laughter] >> no, i could not do their job better than them. it doesn't -- i don't i don't tt would draw my best talent out, meeting with constituents, raising money. i mean, it's very important, and it's understanding -- if you think of the history of the country, it's been very well run. and whenever you look at politics and think, oh, my god, what a mess, you have to say, well, it's always worked out before. does this just happen to be the time it looks like it's not going to work out? the. [laughter] it sure feels that way. >> no, you probably would have to spend a lot of time raising money, though, if you got into politics. [laughter] but i, no, now, you know, what

do you consider your -- you're 55 years old, so that's rell tyly young for -- relatively i don't think for somebody to have the worldwide stature you have. usually people become influential at a later age. you're one of the most respected men and people in the world, one of the most influential in the world, 55 years old o, what would you like to see as your legacy, and what would you like to do for the next, i'd say, 25 years of your active life assuming you have 25 years at least. what would you like, ultimately, your legacy or legacies to be? >> well, the global health area i love because it's so concrete, and it's so impactful. last year a little under nine million children died before the age of 5, and in the next 15 years we should be able to cut that in half. in the next 25 years, we should be able to cut that down to about two million.

and, you know, that has this huge effect in terms of reducing sickness, reducing population growth. and so all it takes is about ten new vaccines, getting them invented and getting those districted and out to lots -- distributed and out to lots of people. so that's going to be -- you know, unless things go way better than i expect, it'll be most of the rest of my life i'll be working on that global health mission. now, i'll have some wonderful milestones along the way. in the next three years, we think we can achieve polio eradication, and that's the thing i'm spending the most time on. even in these tough times making sure the money gets raised, there's a little bit of scientific work that still needs to be done to tune up these vaccines. they're not, they're not quite as good as they need to be. so there'll be very neat things along the way that happen there. in education, education today is

not much different than it was 50 or 60 years ago. i mean, be if you take almost any endeavor, engineering or medical understand, whatever you want to take, the improvement and pace over the last few years has been incredible. in education, that's just not the case. if you said the best teacher was some 1960 teacher, nobody could prove you wrong. so the idea that there is a system where teachers learn from each other, where these amazing teachers which exist that you actually analyze why they're so good, and maybe you can't be as good as they are, but you could be a lot more like them, that -- having an evaluation system that encourages that and having technology come in so that a student can have the world's best lecturers, a student can be analyzed, you can see what you know and don't know, you can be motivated in terms of examples that are of interest to you. anyway, i think i'd love to see

big success in the helping the world's poorest which is health and agriculture, and i'd love to see big success in education outside of my family life, if those things can be achieved, that'd be worth the next 50 years. >> with well, now -- well, now you have three children, and, you know, i -- what would you do if your son or daughter went to college and said, i want to drop out and start a company? is. [laughter] i mean, how would you face that kind of situation? >> well, i wouldn't be able to say no. [laughter] but i think it is kind of an exceptional situation when it's logical to not complete your education. so i'd probably resist as much as my dad did. and, you know, hopefully, hopefully the kid has a passion. being willing to tell your parents that they're wrong, you know, is almost an acid test. if your parents' objection, oh, okay, i'll go back to school, then you probably weren't meant

to drop out. [laughter] >> and how do you keep your family life relatively normal? for example, do you drive your children to school or pick them up from time to time? when you're driving down the streets in seattle, do people stare at you if they see you in a car driving? >> no, people are great. you know, i get to work with lots of smart people, i get to taking the kids to school, everybody's just focused on their kid. you know, we meet lots of families through our kids. you know, we do our best, and the kids are, you know, a lot of fun. learning things with them. i'm very envious of my children because today if you're curious about something, you can find out about it, you know? with your parents go read a wikipedia article, watch a youtube video. whereas when i was young and i asked my participants a question -- parents a question they said, hey, we don't have an answer. >> do you have limits on how much time your children can

spend on the computer? >> i would if they showed signs of extreme behavior like i did. [laughter] >> but, presumably, no elements on xbox, i assume. >> no, i would, i would have limits on all those things. i mean, everything, you know, in this moderation. you want your kids to read a lot, but not to the exclusion of other things. you want them to do sports, do things with friends. striking that balance is hard, you know? that's why that tiger mother thing was such an interesting thing to send around because, you know, you know, what is too much, you know, and what balance should the kids have? everybody draws those lines differently, but so far none of my kids have shown such tendencies that we actually had to make the quota. >> warren buffett famously said he wasn't going to give his children any money, and he ultimately gave them the foundation to kind of monitor and minister and give away money from. in your case, do you have plans how much you might leave your children? how do you deal with the

enormous wealth you have and your children and the effect it will have on them? >> well, i'll give them -- my wife and i will end up giving them a very, very small percentage. the goal, of course, is to give a kid -- [laughter] enough -- >> small percentage is still -- [laughter] >> but you want to give them enough so they can do anything, but they can't do nothing. >> right. >> now, exactly what that number is -- [laughter] and, you know, i'm sure we'll think about it as time goes on. it's, it's a tricky problem because every kid should have a chance to make their own way. their friends and associates shouldn't think of them as somebody who's been handed this strange position. but then again, you know, they do get a great education, they get exposed to meet things, so they're getting one of the best deals in life. and from time to time they'll say remind me why you're not giving me any money? [laughter] >> right. >> it's great, actually, when they ask about something

specifically like, well, at least you'll give me a car, right? and i think, good, we've got the bidding really low here. [laughter] >> so when you go to buy something, are you ever short of cash, or do you have a credit card? [laughter] i mean, do you carry crash? you show a credit card people say, oh, sure, that's really you. >> actually, my name's william h. gates iii, so whenever i would take my dad's credit card, it would say william h. gates jr., and i would use them and they'd say, no, you're too young. id i'd say, no, it says jr. right there. it's been more trouble than it was worth to have the same name as my dad. no, i don't carry much -- i don't have a problem carrying money. [laughter] >> okay. all right, we have some time the -- one last question before we ask the audience. you said your foundation would probably not stay around too many years after your wife and

you leave the earth. is that for a reason? why don't you want to have a perpetual foundation like the ford foundation, rockefeller? what's your thinking? >> >> well, rockefeller, carnegie and some other foundations have done an amazing job. rockefeller foundation at many times picked causes that were totally out of the mainstream -- deworming, schools for black children, medical research, university of chicago -- they just did an incredible job, so everyone should aspire to that level. i don't think, though, at least for melinda and i having a perpetual foundation makes sense because you, there are serious problems today like these childhood health problems or education, and the people who are rich today and have energy should focus their resources on those problems. and there'll be rich people in

the future who can know very well what those problems are. and so, you know, there's a foundation in the u.s. that has to give most of its money in one county. and it's a gigantic foundation. it makes no sense. it's very hard to anticipate what will happen in the future and pick people who with will stay true to it. so we're probably going to have the foundation last something like 20 years after the last of us to go because this vaccine mission that we're involved in, some of these things, we've built up a team and a staff, and you should have continuity. it's worthwhile doing that. but when you pick a time frame when that particular mission will end, then the money should be spent or someone else can form a new foundation. >> okay. any questions, anybody curious to ask a question? okay. we have one back there if somebody can get a mic. >> you stay out of politics now,

you don't endorse candidates, i assume, but are you pretty apolitical? >> i try. >> okay. >> [inaudible] i was wondering if -- [inaudible] >> well, the antitrust experience, i don't recommend it. [laughter] you know, when your own government goes after you, then all the other governments in the world say, oh, great, now we can really go after them too. you're just lying out there in the field bleeding, and every vulture is coming to get you anyway. it's an interesting experience. but, no, i wouldn't say it had necessarily affected my timing. i always knew that microsoft was a company that whoever was leading the technology strategy

should be, shouldn't be 60 or older. and so i chose to retire earlier in my 50s than i might have guessed i would have when i was in my 30s. but i knew it was in that range, 50-60. and what happened was my dad did such a good job on the foundation that i felt like both my impact and my ability to learn lots of things would be higher at the foundation than at microsoft. you never know on these things, but we had a great, great team at microsoft, and i made the change. >> okay. other question? here, go ahead. >> thank you. could you, please, talk about the relationship between agriculture and health and the expressed intent of the new leadership in congress to defund global agricultural development? >> well, the -- yeah. i didn't talk much about agriculture, but other than the health vaccine things we do for the poorest, the next really

sizable thing we do is get involved in agricultural research, that is helping farmers have better seeds, access to fertilizer. and that is supercatalytic. over 70% of the poor people in the world are farmers with very small plots of land who have a hard time feeding their families, and the vagaries of weather are very tough op them. yet -- on them. yet there are these tools to give them better information and seeds to get enough output to have cash crops as well as subsi tense. it's great the world spent a lot on agriculture in the '70s and '80s, although rockefeller, ford foundation were central to that, world bank and government funding for roads and fertilizer. it was a miracle. we more than or doubled in the

output and in many cases tripled the output of farmers. now we need to do that again. africa didn't get the benefit of that first round, but even in asia we need to get yields up. and the u.s. government has funded some of this and was definitely talking about some increases, made a few increases. now it's one of those things that's kind of up in the air in terms of the overall budget picture, is that something that will be maintained, or will it be cut? and there is a proposal where it gets cut, there's a proposal where most of it gets maintained, and we'll see where it turns out. >> okay. another question? here, right here, is there a question? the. >> for a fun question here, what's your golf handicap, and do you ever take mulligans when you play? [laughter] >> yeah, i am -- i was with some friends at augusta just last week which is my once a year, i go once a year. of and i hadn't golfed for six months, but i'd played tennis.

i thought, hey, tennis, that's kind of the same. that didn't work for me. [laughter] i think i was probably golfing to about a 24 handicap when it was all said and done. >> but people the putts, i assume they just give you the putts, i assume? >> we usually have a $1 bet, so that makes them take it all pretty seriously. [laughter] >> okay, back here. >> yes. i'm wondering if you might comment on our recent mayoral election here as a resident of the district of columbia and also as a entrepreneur who's headquartered my business here, the outcome was very disappointing, so i'd like to hear your two cents on that. >> well, washington, d.c. is a system of contrasts, you know, in many ways many of the statistics would tell you it's one of the worst school districts in the country. it is a school district that has a lot of charter schools, and a

lot of those charter schools are quite amazing. there's kip charter school, there's a seed charter school, and they're not only providing great education, they've actually been laboratories to learn about things like if you have kids from the inner city who have a very tough background, can you do well with them? and when kip achieved 90% of their kids going to colleges, spending money at about the same rate as the normal public schools, that was a phenomenal thing. now, the tactics they used -- long school day, going in on saturdays, really getting the kids involved in strong relationships -- those are key things that have proven difficult to map over to the normal public school system, but i think it's a huge contribution. the work that michelle rhee did to put in a teacher evaluation system, you know, we were supportive of that because we believed that over time evaluation systems can get very

good. they can use test data, they can use cameras in the classroom, they can use student interviews, there's all sorts of ways to create a system that's fair and encourages improvement and takes the compensation somewhat away from the pure seniority basis that it's been to date. the jury's out on what's going to happen in the d.c. school system, will they continue to drive forward in terms of the evaluation system, making it better and really running the system in a strong way on behalf of the kids? be you -- you know, so it'll be interesting to see. around the country there's a lot of school districts that are trying out teacher evaluation. the whole state of colorado passed a law, there's six districts that our foundation is funding these new systems in, some in partnership with unions that they've been a good partner in those places. so i think, i think we will get great evaluation systems, and i think the d.c. experience will contribute to that.

you know, and i hope it stays in the vanguard. >> okay. we have time for one more question right here. if somebody can bring a mic -- or, here? last question. >> you've talked a bit about how one of the advantages in the global health arena is that you have very concrete goals to point at and to focus on, and in recognizing the k-12 or, you know, domestic higher education or domestic education spaces is a little more political and perhaps more challenging, with 25% or so of the foundation's resources still focused this that area, i am interested to hear a little bit more about, you know, what are the concrete goals that you believe define success in that arena for the foundation? >> yeah. we have goals in our k-12 education, some of which are the goals that are under our control. that is, how much does the field understand great teachers? and do we have examples of all the key things great teachers do to make the subject interesting, to calm down the classroom, to

help the kid who's behind, to engage the kid who's ahead? there's all these things that these great people do, and you should be able to submit your video to a web site, have somebody critique your teaching, have them point you to examples where those things are done well. so the research on great teaching, that can be done. it's amazing how little has been done on that. over the next three years, that will get done, and people can take advantage of it or not, but that's a key goal. the role of technology in the classroom and helping kids know where they are, you know, there's a huge opportunity there. having the best lecturers available for kids to watch online. ha's something we can make -- that's something we can make sure happens. there's a kahn academy.org that if you want to see this in progress, the work that saul kahn has done -- the creator of

that web site that we support and others do -- is at the cutting edge. it's an amazing thing. if you want to be reminded of anything about math or science, if you want your kids to try it out, i highly recommend it. so the technology piece, the research piece and the idea of what a good personnel system is, that can be designed. for example, we've gone and asked students lots of questions, and it turns out two questions are very diagnostic whether the kid is good. you ask the kids, does your teacher use time in the classroom well, and when you're confused, does the teacher help you out? that has a near perfect correlation with test scores and evaluating kids. it's not hard to ask those questions. then we have goals that are not under our control which are reducing the dropout rate and increasing the number of kids in the united states who either get a college degree or get some

type of postsecondary accreditation for some profession they want to go into. we have very ambitious goals there. now, unfortunately, if you just -- if you ignore the technology or personnel system, those trend lines are all in the wrong direction. that is, as health budgets soar, the funding from both higher education and k-12 is where that comes out of. you know, pennsylvania today is just an example. you know, they cut their higher ed funding by 50%. and so we really need some magic to achieve those goals. we're going to need the personnel system, we're going to need technology, we're going to need to make sure that somehow either by increasing revenue or being smart about health care that we don't defund the level of investment that we make in education. so it's a tough thing, but we do have metrics that we feel very

directly responsible for. >> okay. well, thank you. i want to thank bill very much for giving us an hour of his time this evening. it's very enjoyable. and i want to thank you on behalf of all americans for everything you're doing on behalf of our country and citizens around the world. and to thank you, i wanted to give you two gifts that we have. let me get them now. um, a small token of our appreciation. this is a reproduction of a map of the district of columbia in 1791. >> cool. [laughter] >> and this is a flag that flew on the capitol today, and thanks to congressman dingell and debty debty -- debbie dingell -- [applause] so thank them for that, and i appreciate everything you've done this evening, and i

appreciate everything else you're doing for our country. so thank you very much. [applause] >> thank you, all. [inaudible conversations] [inaudible conversations]

>> yesterday enda kenny became ireland's new prime minister following february's elections. we'll bring you coverage from dublin up next. and the u.s. senate gavels back in this morning at 10 eastern. a couple of senators will give their maiden speeches on the senate floor today. later, the claimer will take up a judicial nomination. senators have been trying to work out an agreement on a house measure that would repeal a tax reporting provision in last year's health care law. live senate coverage here on c-span2. >> c-span2, one of c-span's public affairs offerings. weekdays, live coverage of the u.s. senate. and weekends, booktv. 48 hours of the latest

nonfiction authors and books. connect with us on twitter, facebook and youtube and sign up for schedule alert e-mails at c-span.org. >> ireland's new parliament officially elected enda kenny as prime minister wednesday. his party won 76 seats in ireland's february 25th elections and formed a coalition government with the labor party. following members' speeches supporting or posing the new government, we'll hear mr. kenny's first speech as the head of government or prime minister. this is about an hour, 20 minutes. >> this is this item, number four, nomination. i will now receive motions. >> it's a great honor as the youngest member of the 31st to formally rise today to nominate deputy enda kenny as the next leader of this country. deputy kenny will bring to the office integrity, honesty and a

work rate which simply cannot be surpassed. he will use his skills as a leader to preside over a government committed to public service at a time when such commitment is so urgently required. his ability to recognize the talents and skills of others places him in a very strong position to appoint, lead and preside over a government with the capabilities and the determination to work for this nation and its people. at a time when my generation is faced with the grim prospect of forced emigration and when unemployment lights our -- blights our society yet again, we need a leader determined to restore stability, credibility and hope to this country. the people expect, deserve and require a government led by a leader who will put in place plans which will not just restore our economy, but which will ultimately build a fairer

society. i am sure that my predecessors who stood here and nominated a person to be prime minister have hoped at the core of their nominee was an honesty and a decency. i find myself in the enviable position today of not just hoping that about enda kenny, but actually along with my colleagues on these benches and on all sides of the houses knowing that at the core of deputy kenny is an honesty and decency. today marks a moment in this country's history where we set about realizing the hopes, the dreams and the aspirations of our people. today the period of mourning is over for ireland. today, we hang out our brightest colors, and together under deputy enda kenny's leadership, we move forward again as a nation. it is with pride, honor and absolute delight that i propose the election of deputy enda kenny as the next leader of this country. thank you. [applause]

>> deputy? >> it's my privilege on behalf of the labor party to second the motion that deputy enda kenny be nominated for appointment by the president. this is a historic moment, a moment when the two largest parties in the state have joined together in the nation's interest to form a strong and stable government. a government that knows the national interest is best served by putting the people's interests at the heart of everything it does and every decision it makes. the 31st is one of dramatic change. the government that will be elected here will have the strongest mandate in the history of our state, a mandate to strive with every fiber of our being for an ireland we can be proud to hand on to our children. we face the task with humility, with a sense of privilege and

with determination. this will be a partnership government, a national government where the best of both parties, labour and gael, unite to serve those who look to us for hope and for unity of purpose. that purpose now as it was in the democratic program will be to insure that ireland's economic strengths are used to benefit all of her people. in the words of that program written by tom johnson from 92 years ago, our purpose must also be to secure that no child shall suffer hunger or cold from the lack of food, clothing or shelter and to provide for the care of the nation's aged and infirm who shall not be regarded as a burden, but rather as title to the nation's gratitude and consideration. all of this, then as now, in a free and fair ireland that we can be proud to call our own. [applause]

>> deputy? >> [inaudible] [speaking in native tongue] [speaking in native tongue] >> one of the clearest messages from the people is that they want us to reform the way we do our business many this house, and far too often contributions here are about seeking attention rather than dealing with the serious issues at hand. the difference between permanent campaigning and daily business is sometimes frequently difficult to discern. this has become the case even on

the first day. there has been a growing tendency for speeches to be delivered which take no account of the fact that the election is over and the people have just spoken. equally, a habit has developed of nominating people for the position of leader for the sake of doing so rather than in the belief that the person has a right to assume the office. today it is my intention to break with this. it is clear that deputy enda kenny has been given a man kate by -- mandate by the people to take over the office, and that he should do so in this a coalition government involving the gael and labour parties. we will not oppose his nomination today. in addition, we will not support the nomination of any other person for the office. unless there is some unforeseen development in the government which deputy kenny proposes to the house, we would also not

oppose the nomination of the new government. clearly, this decision was not -- would not effect the outcome of the votes, but it is an important signal about changing the way politics is conducted in ireland. there is, of course, a distinction to be drawn between the vote which would be held today and support for the program for government. fine gael and labour have agreed to share power but -- [inaudible] in the election separate parties and have at best only agreed a post for bridging the gaps between them. on fiscal policy we need to implement the 2011 budget, they voted against a few weeks ago. on financial policy they have agreed to change existing policies, but have not agreed on what specifically will replace them. given the energy with which some deputies in fine gael and labour have attacked policy reviews, the inclusion of over 21 such

reviews in government is more than a bit ironic. in many ways this is one of the least specific programs for government ever published. flexibility is certainly required to make a coalition government work, but the danger contained within this problem is that it leaves so many points for later negotiation. the scale of budget changes for the majority of the term of office and the balance between taxation spending measures should be set out clearly in the government's program, and the failure to do this must inevitably lead to concerns about unresod issues. unresolved issues. a new set of challenges requires a new approach to setting ministerial tasks, and i welcome deputy kenny's intention to restructure cabinet responsibilities. however, the idea that one minister will negotiate the detail of budgets while the other will have responsibility from these decisions is, i believe, a recipe for confusion and conflict, and it is a compromise which appears based

mainly on a failure as to who should be the minister for finance. i want to reiterate that the approach in this style would be to provide constructive opposition. when we agree with a policy, we will support it. when we do not, we will oppose it. and we'll set out a credible alternative. we will not follow the examples seen in recent years of maneuvering to oppose everything for the sake of popularity. self-serving naturetive which -- narrative which others have offered for the past decade may have been helpful in campaigning, but it will not help in the tougher business of governing. it's my attention that we will provide an opposition which is both effective and constructive. equally, i wanted to be absolutely clear that we will defer to no one in our right to represent the nearly400,000 people who voted for us 12 days ago. i am, first and foremost, an

irish republican. this means that i want my country to do well no matter who's in charge. i have serious concerns about deputy kenny's policies, and i sincerely do not believe we have seen a program for government which is capable of addressing the serious issues facing our country. however, i wish him well, and i sincerely hope that he will be successful as leader. thank you. >> deputy akin. >> i oppose the nomination of deputy enda kenny as leader of the fine gael/labour party coalition government. the very first sentence of the program for government states that a democratic revolution took place in ireland on the 25th of february. the oxford dictionary defines revolution as the overthrow of a government or social order in favor of a new system. that being the case, then the program presented by deputy

kenny is a grotesque betrayal of that revolution because it proposes almost to the letter to continue the reactionary program of the old order of the late and unlamented regime of the green party, a regime that was rightly reviled and rejected and sent to blif onby the irish -- oblivion by the irish people for its economic crimes. i'm surprised at the remnants of that government didn't return with their brows heavily stained with pen ten cial ash to recognize the role that they have played. [laughter] the outgoing regime indulged the profiteering speculator and the grasping bankers, imprisoning a generation of young working people in monstrous mortgages and now in negative equity. and when that greed first inevitably choked on its own excess, it treacherously connived with the e.u., imf and

the ecb to save the skins of the major european banks that had their snouts deep in the feeding trough that was the irish property market where they slopped us tremendous netically as -- tremendous netically as a big irish banker. and for this and the crash that inevitably resulted, now we see the savage attacks on the living standards of our people. which this nominee for government intends to continue. today attack public services, they steal from the disabled and the poor. a revolution would overturn and reverse all that. but what this nominee proposes is to confirm and reinstate the disspiritted program by a disspiritted government. the poison now cocktail of austerity. drawn up, concocted by the witch

doctors in brussels and in frankfurt because of the sickness of the european financial system is to continue to be force fed to the irish people by this new proposed government. therefore, a vote for deputy kenny is a vote not for revolution, not for change, but for counterrevolution and more of the same. for monstrous cuts in the living standards of workers and the unemployed including the hated universal social charge which should be labeled the universal antisocial charge. wholesale liquidation of assets notwithstanding the disastrous consequences of previous privatizations. blatant new tax burdens on ordinary people with a water tax and a home tax. a health service held to ransom by private-seeking insurance companies. the first paragraph of the first chapter of a proposal for government that would be honest would try to answer the

question, why should the irish people have their economic lifeblood drained to salvage the tens of billions of euro gambled and lost by private speculators in private deals for private profit in irish property? by what moral code does a government justify placing that on our people? and we will put that question to them again and again until it is answered. can co-leaders work to remember this is not the first time that an irish political establishment responded to an irish and europe-wide crisis by sacrificing it people. nearly 100 years ago the forebearers of today's speculating european financiers and their political clients plunged europe into war into vicious competition for markets, for raw materials and for profits. the irish parliamentary party of the day will forever be

remembered in the infamy, for its campaign to dragoon the generation of youth to feed the insatiable appetite of the imperial war makers. today by sacrificing our people, our services and our youth to feed the equally insatiable appetite of the european and world financial markets, faceless, unelected and unaccountable -- the greens, labour play an equally shameful role. it was worth remembering that it was james connolly who in opposition to that conflict called for a torch to be lit in ireland which would, in his words, not burn out until the last throne and the last bond and bencher was burned. how deeply ashamed james connolly would be today that the labour party which he founded

marchs into -- [inaudible] to become part of a government that will burn not the bondholders, not the speculators, not the grasping big bankers, but the irish people, the working class, the unemployed, the poor, the low and the middle-income workers. socialist party and the united left alliance rejects the right-wing program proposed by deputy kenny. of we reject the rule of the financial markets which is causing such crisis and suffering among our people. we demand instead that they be brought to heel, brought into public ownership and democratic control in ireland and europe and used instead as vehicles of major public investment to create projects that would very quickly see tens of thousands of our people back to work there the tragedy of laying in the dull queue. the government that is incoming today will have a crushing majority in this. they should not think from that that their economic program of

savage austerity will go unchallenged. it certainly will in here. but remember this: we in the united left will facilitate the mobilization of worker power, of people power, of community power to defend the living standards of the vast majority of our people who are attacked by this program and to defend their livelihoods and in opposition to new and unjust taxes. [speaking in native tongue] [speaking in native tongue]

[speaking in native tongue] >> let us remember today as we meet here, also, the magnificent movement of opposition and the sacrifices of ordinary people throughout the world against their horrific dictatorships. and i know that irish working people will want to support them, and we will come back to further discussions on that in the days ahead. [speaking in native tongue] >> jerry adams.

[speaking in native tongue] >> during the election -- and you will know that sinn fein has a number of key priorities -- these included the need to reverse budget cuts to public services and social welfare, the need to abolish universal social charge and to cut and to put an end to the the public money that's been put into the bad banks. that's hardly surprising, if i may say so, that the party does not oppose nomination.

given that they put together the program for government that the new government is going to administer. sinn fein also set out our view of the need to protect those most vulnerable in our society, the poor, the unemployed, people on the margins and those who would never have seen themselves as economically vulnerable but who are nigh on the edge of deprivation and suffering if a real distress. we also set out our clear opposition to plans to downgrade the language, and we have a longstanding view of the need to continue to master the peace process and to build to forge party unity and to continue to work with our union neighbors in the north. so -- [speaking in native tongue]

[speaking in native tongue] >> we come in support of taoiseach to introduce charges and property taxes for ordinary households. it's very appropriate that we gather here at the beginning of lent given what was coming up in the upcoming period. however, as i said at the outset, this is not a personal issue. i respect the gael, and we wish the leader and the government well and wew